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Digital journeysFebruary 1 2017

Credit Suisse develops a digital culture in private banking

Marco Abele, a digital transformation expert at Credit Suisse, argues that culture – not technology – is the main success factor when re-engineering a bank for the future. He describes to Joy Macknight how the bank architected a culture shift in its private banking business.
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Marco Abele

When Credit Suisse decided to revamp its digital private banking operations, it began in Asia-Pacific for three reasons.

First, it is an exceedingly digital marketplace, a characteristic that spans the generational divide. Second, the region has rapidly growing wealth pools, which require a technology solution that can scale quickly to respond to market demand. Third, the Swiss bank’s Asia-Pacific management team were quick to recognise and embrace the effect digital could have on the wealth management business.

Coming together

Credit Suisse converted an old data centre in Singapore into an innovation hub. User experience designers, researchers, relationship managers, architects and change management specialists all sat in one open-plan room. “It was important to bring everyone together from a cultural point of view – we had to convince them that this was not simply a technology programme but how we were going to operate in future,” says Marco Abele, who spearheaded Credit Suisse’s digitalisation initiative from 2014 until the end of 2016.

He admits that bringing the different roles together was a difficult task, but the approach reaped impressive results. Using agile and scrum methodology, the team launched the first version of its new digital private banking platform in just five months.

“A big success factor was that the local head of Asia, the IT head and I took decisions twice a week. Therefore staff could escalate queries or issues quickly and move on. This is markedly different from typical steering committees and lengthy projects of old,” he adds.

Credit Suisse also adopted a new approach when it launched its new internal platform, which combines a variety of applications under one single user interface. It sought to put the users – i.e. relationship managers and client advisors – at the centre of development. The platform was not 100% ready at launch – more like 20%, according to Mr Abele – which gave advisers and relationship managers the opportunity to influence the platform’s design.

“It is a co-creation model, which creates buy-in from those that are affected by the new platform and also creates a much better product in the end than IT developers could build in isolation,” says Mr Abele. “It was a huge cultural shift for the users to accept a prototype that was not yet finished, but many people looked at it as a chance to shape the company.”

From the top

In order to foster an understanding of the need for transformative change, Credit Suisse works with Singularity University, a California-based think-tank. Its main purpose is to help the bank’s top management stay abreast of new developments in other industries and familiarise them with the fundamental concept that technology is evolving exponentially.

“Most banks don’t have the sense of urgency needed to make big investments, change processes and educate staff. However, if they don’t prepare now for the accelerated wave that will come in four to five years, then they are in big trouble,” says Mr Abele.

His biggest challenge is in convincing employees across all management levels to adapt to the new way of working, especially those heavily invested in the old ways. To address this inertia, Credit Suisse is actively engaging change agents to educate its workforce.

To get external inputs the bank made co-investments in a start-up accelerator called Kickstart, as well as ImpactHub, both of which are housed in old factory buildings in Zurich. “Credit Suisse managers are brought in to see how the fintechs work differently. Entrepreneurs don’t need boardrooms or top-down management decisions – they just walk across the floor and get inspired by what other people are doing,” says Mr Abele.

However, he cautions against spending too much time looking and not enough doing. “Fintech is a huge buzzword – yes it is going to change the financial industry but it seems to me that it is much more a ‘talking about it’ buzz than ‘effectively doing it’,” he says. “A balance must be struck between being inspired by and being exposed to new things and at the same time getting our own things done.”

Impact of new technologies

Three technology trends will radically change the banking world, according to Mr Abele, potentially wiping out 70% to 80% of incumbents within the next decade. The first trend is peer-to-peer platforms, which could eliminate the intermediary function that banks have held for centuries. Second is blockchain, because it could remove the existing cumbersome infrastructure, as well as eliminate banks’ custodial function.

The third trend is artificial intelligence, because it has the potential to do away with bankers themselves. “The trick will be to complement the power of the computer with human interaction because private banking clients will still desire that human touch in the next decade or so,” he says.

Mr Abele also predicts that the large technology companies will enter the banking arena within the next seven years. “The regulatory burden is discouraging them today but most regulators are opening up sandboxes to make regulation lighter for fintechs, which in turn will help the tech giants such as Apple, Google or Amazon enter the market.”

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Joy Macknight is the editor of The Banker. She joined the publication in 2015 as transaction banking and technology editor. Previously, she was features editor at Profit & Loss, editorial director at Treasury Today and editor at gtnews. She also worked as a staff writer on Banking Technology and IBM Computer Today, as well as a freelancer on Computer Weekly. She has a BSc from the University of Victoria, Canada.
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